Great advice in coin world
Gazes
Posts: 2,315 ✭✭✭✭✭
I can't say I read too much in coin world that I didn't know and it doesn't take long to look through the magazine. But this week Q David wrote something that stood out to me
"Without exception to my knowledge anyone who has carefully collected basically scarce and rare older coins (not modern issues in high grades) who has learned about grading and eye appeal and who has been careful and bought a wide selection of quality coins has made a nice profit if the coins have been held 10 or 15 years. I am not aware of even a single exception!"
The rest of the column is worth reading but I thought this simple statement is a worth reviewing before the purchase of any coin
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Comments
I've read something similar by QDB over the years and this appears to be slightly modified from earlier versions. I doubt "eye appeal" was even mentioned in earlier decades. And the "wide selection of quality" takes away a lot of sins from the euphoric market peaks of 1980, 1989 and 2008. What does "scarce and rare older coins" mean? 1797 halves in G-XF or Proof 66/67 Lib nickels? They are both scarce in a worldly sense. One has soared and one has crashed over the past 25 yrs.
Until we can pin down just exactly what all these words really mean (scarce variety is far different than a scarce type coin) hard to say if there are exceptions over the past 10-15 yrs. I would say there probably are. A "wide" selection of coins would likely dig into your performance (ie dilution) even if it minimizes the overall portfolio risk of losing money. I can imagine someone buying a varied portfolio of choice/gem Morgans, choice/gem commems, gem type, gem gold, etc. back in 1989-1990 that all would have been considered scarce/rare coins back then. And they'd be very much underwater today. The expertise and knowledge that QDB suggests is often seen in top dealers and top collectors....probably the top 5-10% of the hobby. No doubt, they have navigated the waters safely. For the other 90% of the hobby, I guess the "know your dealer" phrase is one of the keys to your potential success.
The effects of gradeflation from 1990-2008 aren't mentioned...and clearly not part of one's decisions 25-30 years ago. 20 yrs before CAC (1989), it was luster and marks that drove the coin market. It's been eye appeal the past 5-10 years. That's a huge transition that could have dashed many portfolios of the 1980's and early 1990's where technical grades trumped "eye appeal." If we could all go back to 1989-1993 we'd have loaded up on monster looking and scarce MS/PF 62/63/64 coins that had fairly minor flaws keeping them from a 65 or higher grade. Those same coins today often trade at 65/66/67 price levels.
QDB gives excellent food for thought. I would suspect that in another 10-15 years, the driver's of that market might be different than the drivers of today. Eye appeal may not be the end-all.
This is a theme DB has expressed for decades. I'll have to agree with him and most of what was added above.
I agree with your comments and noticed that Q used words that gave plenty of wiggle room. However, as general rule, I think reading his quote before making any purchase, may help avoid mistakes
Buy and Hold. Works for QDB, and WB.
``https://ebay.us/m/KxolR5
I'll simplify.
If the design is still on a coin in your pocket, don't put no damn MONEY into buying one.
If your primary motivation is profit, then you're over-thinking it and you might be collecting for the wrong reason.
I say collect what you like, have fun, and enjoy the ride.
ANA LM
USAF Retired — 34 years of active military service! 🇺🇸
Buy and hold usually means that the item has such a high markup that short term profits are unlikely.
"to my knowledge..."
"carefully collected..."
"basically scarce and rare..."
"learned about grading and eye appeal..."
"been careful..."
"bought a wide selection..."
"quality coins..."
"held 10 or 15 years..."
Holy Moly! With all the hedging, qualifiers and vague statements used in that sentence I think we can now say that QDB is eminently qualified to be a politician!
In honor of the memory of Cpl. Michael E. Thompson
Time is your friend when you buy quality goods.
100% Positive BST transactions
i agree with that.
I'd say anyone that bought even Very high grade early commemoratives( ms-66 and above), which many are very rare in the late 1980's would strongly disagree with this statement in 2017
That's something I could agree with.
That has been the "common sense" approach for generations; but realizing that a "nice profit" is not necessarily as much return on investment as if the same funds were invested in common stocks or commercial real estate, etc.
It's a hobby...enjoy it!
Since I collect for the pleasure of owning the coins (i.e. history, design etc.), and I am not seeking profit, then the quote is interesting, general and, for me, not applicable. Cheers, RickO